Rio Tinto (NYSE:RIO) had considered a takeover offer for miner Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY), which is now targeted by BHP (BHP), the Australian Financial Review reported Friday.
Rio Tinto (RIO) “management had not ruled out making a play for part or all of the mining group and continued to study the day-to-day situation,” according to the report, which also said there is no suggestion that Rio is about to make an alternative bid for Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY).
The company should not challenge BHP (BHP) for control of Anglo (OTCQX:AAUKF) (OTCQX:NGLOY) and should instead target smaller lithium and copper producers, Janus Henderson Investors portfolio manager Daniel Sullivan told AFR.
Rio (RIO) does not have the capacity to fight BHP (BHP) in an auction for Anglo (OTCQX:AAUKF) (OTCQX:NGLOY), Sullivan said, and has much better targets in companies such as Pilbara Minerals (OTCPK:PILBF), Arcadium Lithium (ALTM), Teck Resources (TECK) and Sandfire Resources (OTCPK:SFRRF), and “needs to build a dynamic growth acquisition partnership model to attract many agreed acquisitions to rapidly diversify their iron ore exposure.”
Sullivan said BHP is “absolutely” pursuing the right target in Anglo (OTCQX:AAUKF) (OTCQX:NGLOY), and is “determined to be the global mining investment choice, which leads to an American-centric asset and shareholder base. This ultimately leads to BHP redomiciling in the U.S. and with a U.S. primary listing.”